During my working years I always paid for Disability Insurance to make sure I was covered. Back in the days I had heard many stories of people who had freak accidents and were out of work for quite a while and needed the Disability Insurance to help maintain their living expenses for their family.
Insurance is a part of protecting yourself and family in case of an accident and can help with your Financial Freedom goals. Think if you were out of work for a long time without a paycheck because you fell off the roof while hanging Christmas Lights than you may have to use your up your savings for money to live on. That could possibly set you back a while from your projected Financial Freedom date or Retirement date.
This is an important lesson to cover with our boys. Even though they may not be in their career for years we want them to know the importance of protecting themselves financially. I know of one family that their lifestyle was really hurt when their main breadwinner had a Heart Attack and didn’t have any Disability Insurance. He was self-employed, I think.
As always, I am not giving you any Insurance or Financial Advice and you should seek advice from your Professional Insurance and other Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.
Here is what Investopedia says about Disability Insurance;
- “Disability insurance is a type of insurance that will provide income in the event a worker is unable to perform their work and earn money due to a disability. There are many types of organizations that provide different types of disability insurance. Each organization and disability insurance type have specific rules as to what constitutes a disability and how a person might qualify to receive the disability benefit
- There are two basic types of disability insurance.
- Short term disability insurance policies offer a worker a portion of their salary if they are unable to work for a short period—typically three to six months.
- Long term disability insurance offers a worker a portion of their salary if they are unable to work for a longer period—typically a period of over six months.
Both short term and long-term disability policies have a period that a person must be disabled for before that individual is able to start receiving disability benefits. That period of time is called an elimination period. If a person becomes disabled, they must wait until the elimination period is over before they start receiving benefits. If they are able to work before the elimination period is over, the person will not receive a benefit.
The Social Security Administration also provides disability insurance. Employees who’ve paid the Federal Insurance Contributions Act (FICA) tax for a certain amount of time, are eligible to receive the Social Security disability income insurance if they meet the strict requirements of disability under the OASDI program.
- Disability insurance comes in many forms and can be obtained through a wide range of providers for a wide range of prices. The price of a disability insurance policy depends on the length of the elimination period, the benefit period (how long a person is able to receive the disability benefit), and how strict the definition of disability is under the policy. Each policy can have its own definition of what qualifies as “disabled,” so it is important to understand these rules before buying a policy.”
What Investopedia said above is some good information. To see more details on what they said about it the link is in the below show notes for fact checkers.
Like I said before I always bought it when I could. Be sure to check with your employer and see what they cover and when it starts paying out. Also check what they charge for the coverage and then check with your local Insurance agent to see if it is a good deal or if they have a better priced plan.
Normally Disability Insurance will replace 60 to 75% of your income I believe while you can’t work. That could help you and your family while you are out of work and while you are healing up. That amount of money could help keep you from going into debt.
Having a good Insurance agent that you trust is an important part of our Financial Team that we have. Insurance agent can help make sure you have the correct coverage and products for your situation.
It never hurts to also shop around for the best coverage and rates. Since we have moved to Arizona, we have switched Insurance companies twice. We suggest to our boys to shop around for quotes once a year to make sure they are paying the lowest rates.
Do you have Disability Insurance? Have you ever had to use it? Do you believe in it? We sure do and we want our boys to help protect their incomes with it when they are older.
Here are some positive quotes I like;
“Get your Money to Work for You… As hard as You Work for it.” By Napoleon Hill
“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett
“There is no way to happiness; happiness is the Path.” By Buddha
“Change Your Thoughts – Change Your Life” by Wayne W. Dyer
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Sources and Resources from Podcast (Available in Show Notes)
- Investopedia says about Disability Insurance https://www.investopedia.com/terms/d/disability-insurance.asp